Russian foreign debt increased slightly in 1Q19

Russian foreign debt increased slightly in 1Q19
Russia's foreign debt remains below the 2014 peak of $733bn and has fallen to $467.8bn as of the end of March 2019
By bne IntelliNews April 26, 2019

Russia’s external debt increase slightly in the first quarter, mainly due to the government’s debt to foreigners, Bank of Finland Institute for Economies in Transition (BOFIT) reports.

Russia's foreign debt, which is mainly held by companies, banks and the state, remains significantly below the 2014 peak. In mid-2014, the debt was about $733bn, but at the end of March 2019 it was about $468bn.

Since the peak of 2014, both sanctions and weak economic development in Russia have reduced foreign debt, largely due to debt repayments. The weak economic situation also reduced Russia's foreign debt in the context of the 2009 financial crisis, but then the debt level quickly recovered after the crisis broke out. The impact of sanctions is reflected, in particular, in the continued decline in foreign debt of Russian banks, as Russia's largest banks, including Sberbank and VTB do not receive new long-term funding from the EU and US.

At the end of March, the Russian state had more than $53bn in foreign debt (11% of total foreign debt) and banks over $82bn (18%). Other sectors, mainly non-financial corporations, accounted for about $318bn of foreign debt (68%), of which $142bn was debt between parent company groups and subsidiaries.

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